Hexagon (Buy, TP: SEK130.00) - Waiting for focus to shift to 2025
We expect Hexagon to remain in ex-growth territory in its seasonally small Q3 – which is already priced into the stock, trading at trough multiples on an absolute and relative basis. However, we are confident it will re-establish its growth credentials, with: 1) our end-market framework pointing to mid-single digit organic growth in 2025; 2) new product launches; and 3) easier YOY comparables. As short-cycle headwinds dominate the investor debate, Hexagon’s relative resilience qualities should also appeal. We expect the former favourite with investors to close this valuation gap, and gain support from recent insider activity. We reiterate our BUY but have edged down our target price to SEK130 (135) after lowering our 2024–2025e adj. EPS by 3–4%.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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